One of the great features the 360 offers is the ability to stream media from your PC. Originally this was only available if you had a Windows XP Media Edition PC. Now all you need to do this you need to have Windows Media Player 11, Windows XP SP2 and to have your 360 and PC on the same network. Since I use s wireless connection for both my 360 and my PC the setup was extremely easy. All I had to do was open Media Player up and set it up to allow access to my 360. Now any WMV video that is in the My Videos folder or MP3 in My Music folder under My Documents is now available on my 360. So far I've only used this for watching The 1Up Show and listening to my MP3s though my stereo system. You can downloading movies or tv shows and streaming them to their 360. I know I hate watching shows on my PC and would much rather be watching from my couch.

I know the 360 will support new video formats in the upcoming Spring update. I'm not sure if this means you will be able to stream H.264 or MPEG-4. You should be able to watch movies in this format by playing them off of a USB drive. There is also some tools to convert movies to WMV for use of streaming them to your 360.